Fredric Andersén: “We are selective about who we onboard”
The managing partner and co-founder at the House of Reach, talks about establishing the Swedish fund distribution and marketing specialist and how they do business on their own terms.
The Nordics can be a tough sell to any aspiring asset manager looking to break into the institutional market. The sophistication of the Nordic investors combined with the growing demands around ESG can leave even some of the more experienced fund managers struggling. To help managers bring their products and ideas to Nordic investors, a trio of ex-bankers from Sweden have set up a company that works both as an incubator and a promoter of niche strategies in the region.
House of Reach specialises in fund distribution and marketing, something that the founders have a long experience in themselves having worked in various roles within the industry throughout their careers. An idea, that was first tossed in the air over a coffee a few years ago, has now turned into a growing business with nine clients already on the firm’s roster. Fredric Andersén, managing partner and co-founder at the House of Reach says that the trio’s experience and familiarity with each other has enabled them to scale up the business in a short time period despite the ongoing covid-19 restrictions. “We have a long history together. We have worked as colleagues, competitors and partners so we know each other very well and have always liked each other, which makes working together easy,” he says.
Although having started just months before the pandemic closed down most of Europe, the team that includes the three founders; Fredric Andersén, Johan Wahlman and Peter Dahlgren, as well as relationship manager and advisor Daniel Westlund, marketing and communications manager Ulrica Matsers and senior communications consultant Jonathan Furelid in Stockholm and advisor Henrik Bak in Copenhagen, has managed to keep up with steady growth. “We have not been that much affected by the pandemic. In Sweden, we’ve actually been at the office most days,” says Fredric Andersén, adding: “The pandemic has affected the Nordic markets differently. While for example Norway has been shut down for periods, Sweden has been fairly active under the circumstances, even though many people have been in the wait and see mode.”
The pandemic has also not stopped the firm from hiring. The latest addition to the growing team joined the ranks in August last year when Knut Nordenhaug stepped onboard as partner and head of Norway. Knut Nordenhaug, who has previously worked as the chief operating officer of Storebrand Asset Management, and chief investment officer as well as chief financial officer at Gjensidige Foundation, was not able to visit the team physically during the hiring process due to the strict restrictions on movement in place in Norway. However, that did not deter the team from going through with the hire: “Some of us knew each other from before so a face-to-face meeting was not absolutely necessary. We knew what we were getting with hiring Knut. He has a wealth of experience and is a good match to our growing team,” Fredric Andersén says.
There is also a new hire in the pipeline that would extends the firm’s reach to Finland, however, Fredric Andersén says he cannot yet reveal more. “It hasn’t been finalised yet so I can’t say more at this point,” he says.
The reason the firm is keen to have a representative in each Nordic market, says Fredric Andersén, is the differences between them. “What is not readily obvious for many managers outside Nordic region is that the countries really differ from each other. The clients behave in different ways, portfolio looks different, structures looks different and even the currencies are different,” Fredric Andersén explains. When asked what it takes for an asset manager to make it in the Nordics he replies: “You have to understand the institutions you are talking to, and you have to be able to understand their situation and needs as well. Currently managers with alternative and more niche strategies are in vogue in the region but it is also important to have the ESG angle ingrained in your products and your pitch, and it needs to be an integral part of the strategy. We met a manager not so long ago that presented us their pitch, which I think was some 50 - to 60 pages long. However, the first time they had any mention of ESG was page 49. That’s just not something you can have when pitching to Nordic clients. ESG needs to be at the foreground, not an afterthought.” Fredric Andersén says that currently some 99 per cent of the firm’s clients have ESG compliant strategies.
The team at House of Reach is guided by the firm’s three values; be passionate, be rigorous and be kind. “I think they are good values and reflect the region we represent well too. You can be kind and still be business-minded. Those are not mutually exclusive,” he says. When the values are put into practise it can sometimes mean that the team turns away potential clients. “We are selective about who we onboard and we take our time to evaluate potential clients. We are committed in supporting the clients we onboard to reach long-term success in the Nordics. We cherish our relationships with the institutions and if we find that the manager, for instance, is not aligned with our corporate values or relevant for the Nordic institutions, we don’t want them onboard,” he explains.
Fredric Andersén is also very open about the amount of hard work that goes into successfully developing a brand and building a reputation for a strategy that will be able to attract investment in the Nordic region. He says private equity, infrastructure and real assets are asset classes that the Nordic investors are currently looking to invest in. “ESG-wise water is an example of hot topic at the moment,” he adds.
House of Reach is also working on launching a Luxembourg fund structure in the near future. “We never promise to anyone that they will win billions. What we promise is that we will support them reaching the maximal success they can in our region,” Fredric Andersén says. “To be successful in the Nordic institutional market you need to have a thought through and understandable strategy in pretty much all assets classes these days, including genuine ESG integration. The change is gradual which we are very happy to see and we actively contribute to support and speed up that trend.”
In the future, Fredric Andersén says the team hopes to grow the company further as he sees a definite need for the types of services House of Reach offers. “We are looking to build a long-term growth company. To be honest, we all consider this as our final gig. We’re too old to mess about now,” he says and laughs. “Our edge is our experience and knowledge from this field. We’ve researched and bought these services ourselves in our previous jobs and we also know the relevant institutions so we have the distribution network covered,” he adds.